In a surprise development that may have an impact on the fate of still wobbly South Canterbury Finance, its ex-chairman and current President for Life Allan Hubbard has been placed under statutory management following breaches in Aorangi Securities, a separate company he owns and manages.Aorangi Securities itself has been placed into statutory management along with Allan's wife, Margaret Hubbard, who is the director of the company, and some charitable trusts associated with Aorangi.The breaches specifically relate to Aorangi transforming itself into a finance company because it conducted the activity of raising funds from investors and on-lending them to borrowers, an investigation of the company concluded.Also, the company made loans without adequate documentation, and contrary to instructions given by investors that their deposits be lent under the security of a first registered mortgage.Importantly, Aorangi lent unsecured funds to Mr and Mrs Hubbard, which were then invested either in their own right or through related entities.Aorangi made loans of around NZ$134 million, funded by deposits of at least NZ$98 million from 407 investors in Otago and Canterbury.The company is not listed as a member of the borrowing group of South Canterbury Finance. It therefore seems that Aorangi would be in breach of the Reserve Bank of New Zealand's norms for non-bank deposit-takers that require them to have a credit rating, among other things."The Registrar of Companies has referred a number of matters relating to Aorangi Securities Ltd to the Serious Fraud Office to investigate potential breaches of the Crimes Act," a release from the Minister of Commerce, Simon Power, said.The move was announced by Power yesterday following recommendation from the Securities Commission and after advising the acting Prime Minister and senior Cabinet Ministers.The decision comes as a result of a complaint on February 28 by an investor who did not receive an investment statement or a prospectus for depositing funds, and concludes an investigation that lasted a "number of weeks and involved the Companies Office and Mr Hubbard."Extending statutory management to Mr and Mrs Hubbard was important because they were so closely connected with the business and affairs of the entities that the statutory managers would be unable to effectively exercise the powers conferred by the Corporations Act.The Treasury was quick to react to the news and issued a statement saying the announcement does not apply to South Canterbury Finance and won't affect the government's retail guarantee on the company.The announcement spurs speculation whether Hubbard's decision to step down from the board of South Canterbury Finance was taken in anticipation of such an outcome of Aorangi's investigation.